Today’s real estate companies, whether we’re talking about real estate crowdfunding websites, brokerages, mortgage companies, or developers, have no choice but to adopt the technologies that make their businesses more efficient, more effective, and more competitive. The companies that adopt today’s technology will be the leaders of tomorrow. Those that don’t will relegate themselves to irrelevance.
The future of real estate is predicated upon three primary technological initiatives:
- Replacing manual paper processes with automated digital workflows
- Leveraging data to improve results
- Focusing on cybersecurity
Let’s take a brief look at each of these initiatives.
Automated Digital Workflows
Some areas of the real estate business still rely heavily on shuffling paperwork. Mortgages come to mind as one part of the industry still stuck in the past. In order to move ahead, real estate companies in every corner of the sector will need to digitize processes in order to make them more efficient and cost-effective. Innovative mortgage providers are beginning to provide home buyers with a faster way to apply for and get approved for a mortgage. Different technology platforms have managed to streamline the process for banks and non-bank lenders to reduce the time it takes to underwrite a loan from an average of 5-6 weeks to just a few days. Real estate companies must maximize the use of technology to make the mortgage process easier and faster in order to meet the “on-demand” generations’ increasing expectation for more speed and transparency.
Other companies making strides in automating digital workflows are real estate crowdfunding platform with programmatic investment options that match investors’ specific real estate investment criteria. Several RECF platforms are using automated investing tools to help investors get into deals faster, and more efficiently.
When the Multiple Listing Service (MLS) got its start in the mid-1970s it was cutting edge. But the world has changed since then, and consumer expectations have changed. Not only that, but professional expectations have changed for those inside the industry.
While the MLS is still a great tool for real estate brokers, it does have its limitations. Today’s real estate professional demands more robust technology and deeper insights into relevant information. Home buyers and sellers, real estate investors, developers, and real estate service companies all want real-time data that is accessible 24/7 from any touchpoint and on any device.
The nature of the data that consumers and professionals are looking for goes beyond comparative listings. For that reason, real estate firms that want to service their customers better and more efficiently need to rely on multiple data sources and tap into those sources with a continuous stream of information that is accessible at any time. Application Programming Interfaces and artificial intelligence tools provide companies the ability to leverage data in powerful new ways, and they allow for easier access to that data to more people with fewer limitations.
Real estate companies that want to compete in the new economy must use these technologies to leverage more granular data on properties, buyers and sellers, brokers, investors, developers, and their partners and competitors.
Keeping Data Secure
As more data is accessible through digital access points, the more important it is to safeguard that data. Data breaches like those at Experian and JP Morgan illustrate the vital importance of cybersecurity. In July 2014, hackers broke into JP Morgan servers and gained access to information on 76 million households and 7 million businesses. No damage occurred as a result, but the hack gave criminals access to key personal data that could have led to long-lasting financial trouble for millions of consumers.
While no major data breaches have affected the real estate industry yet, it’s just a matter of time before consumer data is exposed. Real estate companies must take measures to secure and protect sensitive consumer data. Considering how fast companies are moving to the cloud, compliance has become increasingly important. The real estate technology companies that compete in the future must take cybersecurity as seriously as they take marketing initiatives. Compliance oriented firms should meet requirements developed by the American Institute of CPAs, such as SOC 2 and SOC 2 type II certification to ensure their system is designed to keep sensitive client data secure. When it comes to working with the cloud, such certifications are essential and increasingly required by regulators, and auditors.
The real estate industry is very competitive and getting more so. Companies in every sector will need to ensure they are effectively managing their workflows and protecting consumer data. Leveraging technology is the key to increased competitiveness and survival in the 21st century.